DOMINION'S FINANCES.

Auckland Star, Volume LXIII, Issue 93, 20 April 1932, Page 14

DOMINION'S FINANCES.

BUSINESS MEN PERTURBED. THE ADJUSTMENT BIKL, SUGGESTIONS TO GOVERNMENT. Deep concern is felt by the Associated Chambers of Commerce of New Zealand at the statement concerning the National Expenditure Adjustment Bill made by the Minister of Finance on April 7. In a letter to the Prime Minister, the Rt. Hon. G. W. Forbes, the association says that it recognises that the circumstances surrounding the financial situation arc so grave that drastic and unpalatable mea. sures are necessary, but it urges that the measures employed should not transgress the principles upon which the orderly business- of the State and its nationals is based. The business community, the association says, willingly accepts its share of the burden, but feels that the Government, in its desire to meet certain sectional interests, has overlooked the serious consequences which may follow its acts. Extracts from the letter sent to the Prime Minister by the association arc: — " The industry, trade, and commerce of the Dominion are the sole fountain from which the community and the State are nourished. The very fabric of this business is threatened by the load which is being imposed upon it, and our association desires to stress the importance of not adding more than is absolutely necessary to that load. Our association again respectfully submits, its previous suggestions that compulsory enactments by the State in connection with the reductions of interest and rent, and the variation of contracts as between one national and another, are unnecessary, and will bring evils in their train which will be regretted. Deposit and Advances Rates. "' It is suggested that the liberty now given to the banks to reduce their deposit and advances rates by voluntary arrangement, and to announce these at their pleasure, might have been given to all sections of creditors in their relations with their debtors, after a lead had been given by the State in the reduction of deposit rates in the Post Office Savings liank, and by Government Departments, and of interest by local and national government by equitable arrangements. And, if compulsion were eventually necessary, the deposit rates and advances and other interest rates should have been decided upon evenly as between all institutions, instead of partially and inequitably. " We submit that the present financial plight of the country and of its citizens is due to the failure of private enterprise to make profits. Interference by legislation with existing public and" private contracts will not assist private enterprise to make profits; it will only hinder the re-establishing on a profitearning basis of primary and secondary production, of commerce, and of professional enterprise. " The Government cannot restore prosperity by cancellation of contracts or by legislative interference. But the Government can set an example in drastic ami rigid economy, and can keep taxation down to an absolute minimum by removing every legislative obstacle to the making of profits by private enterprise. "Without profits there can be no taxation except by confiscation of capital, and without capital the business of the country cannot continue. Economies Inadequate. "As regards economy and the keeping of taxation at a minimum, the Govern* ment proposes to meet an estimated deficit of £H.;?00,000 to the extent of £6,300,000 only, and to effect this Lv increased taxation (including unemployment tax) of £.1,0.-)0,000. drawing from the Highways Fund £o2.">,000, reliance on the Hoover moratorium for £000,000. and real economies of only £1,42.">,000. In addition, the Government proposes to increase, unemployment taxation bv £800,000 over and above the £l,4."i0,000 increase allowed for in the Bud"-e1 figures. Wo submit that these real economies are totally inadequate and out of all proportion to the economics thai have been found necessary in private business. We suggest that the Government should first adopt all the economies already recommended by the National Economy Commission, and then diligently search for further opportunities of economy. State activities in this Dominion require drastic curtailment. The increase of the national expenditure up to approximately £28,000,000, which is forecasted by the statement for the present year, is proof of the failure to make sufficiently largo actual economics.

Repeal of Other Acts Urged. "As regards the removal of legislative obstacles to the making of profits by private enterprise, the Government has made a good beginning on this very big task by the amendment of the I.C. and A. Act. We suggest that it should follow this up by the overhaul of all legislation requiring inspections, and reduce to a minimum the army of Government inspectors who inflate costs throughout this Dominion and harass its traders. The Government could then further promote opportunity of profit byprivate enterprise by withdrawing compulsory powers from all established control boards. This could well be followed by the repeal of the Commercial Trusts Act. the Cost of Living Act, the Kent Restriction Act. and the Board of Trade Act, all of which acts of Government interference with private enterprise are contributing their share to the present depression. "Further, we urge the Government to eliminate Government and local body trading that competes with the trading of the country's private citizens and taxpayers. If it be considered advisable to retain such Government or local body trading it should be subjected to the same taxes, rates, charges and duties as the trading of private citizens.